Broadband Industry Presses Challenge To NY Law Requiring $15 Broadband

The broadband industry is pressing the Supreme Court to review a New York state law requiring carriers to offer $15 a month service to low-income residents.

“Whether a state can set the rates for broadband internet access service -- an interstate communications service -- is a question of exceptional national importance,” cable and telecom organizations write in papers filed Wednesday with the Supreme court.

The groups say that New York's law could spark other states to regulate the price of broadband as well as other “information services” -- such as services offering streaming video or cloud-storage.

The organizations' latest argument comes in a legal battle dating to 2021, when cable and telecom lobbying groups including CTIA--The Wireless Association, ACA Connects--America's Communications Association, US Telecom--The Broadband Association, and NTCA--the Rural Broadband Association sued to invalidate New York's newly enacted Affordable Broadband Act.

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The groups claimed that only the federal government can regulate the broadband industry, and that New York's law conflicted with the Federal Communications Commission's 2018 repeal of the Obama-era net neutrality rules. As part of that deregulatory move, the FCC reclassified broadband from a “common carrier” service, governed by Title II of the Communications Act, service to an “information” service, subject to Title I. (Earlier this year, the FCC voted to reinstate the “common carrier” designation, but a federal appellate court halted that move pending an appeal by the broadband industry.)

U.S. District Court Judge Denis Hurley in Central Islip, New York blocked New York's law, ruling that the FCC prevented states from regulating broadband prices by reclassifying broadband as an information service.

Attorney General Letitia James appealed to the 2nd Circuit Court of Appeals, arguing that the federal Communications Act doesn't prevent states from passing their own consumer protection laws.

A panel of 2nd Circuit Court of Appeals agreed with James, ruling 2-1 that the law was valid. The panel ruled that the Republican-led FCC stripped itself -- not states -- of authority to regulate rates in 2018, when it revoked the prior rules.

The broadband industry then urged the Supreme Court to hear an appeal of the 2nd Circuit's ruling, and to stay that court's ruling.

New York officials opposed the industry's request for Supreme Court review, and agreed to hold off on enforcement until the court makes a decision.

James noted that 2nd Circuit's decision was consistent with rulings by other federal judges in California and Maine.

Two years ago in California, the 9th Circuit Court of Appeals upheld a state net neutrality law that prohibits broadband providers from blocking or throttling traffic, charging higher fees for fast-lane service, and exempting their own video streams from consumers' data caps.

And in 2020, a federal district court judge in Maine refused to block a state privacy law that requires broadband providers to obtain people's consent before using web-browsing data for ad targeting.

James also discounted speculation that New York's law could spur other states to pass similar measures, noting that no other state had enacted a measure comparable to the Affordable Broadband Act.

The broadband industry counters in its new papers that other states “would surely” pass similar laws, if New York's measure takes effect.

“New York’s observation ... that no other state has yet regulated retail broadband rates is cold comfort to providers,” the cable groups argue.

“If the [Affordable Broadband Act] were to take effect, it would be a watershed moment. Many state legislators and bureaucrats would surely then follow New York’s lead,” they add.

The Supreme Court hasn't yet indicated when it will rule on the industry groups' request.

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